If the lower-paid workers succeed in getting their way, this will raise FCIs annual labour bill of Rs 2,500 crore by another Rs 1,600 crore. If, on the other hand, the food ministry succeeds, it will lower FCIs wage bill by around R1,000 crore.
The fight essentially pertains to 162 of FCIs 464 depots, mainly in traditional cereal-growing states like Punjab and Haryana, where 17,000 persons are employed at an average salary of R64,000 per month including emoluments like LTC and overtime benefits a small fraction of these loaders even get paid upwards of R2 lakh a month. Thanks to the Contract Labour (Regulation and Abolition) Act of 1970, these depots were notified as ones a few decades ago where contract labour would not be permitted and only departmental labour would be allowed. Given the nature of their work, and their large salaries, most of these workers outsource their jobs to contract workers.
In order to reduce this cost, the food ministry has written to the labour ministry asking for these 162 depots to be de-notified so that contract workers can be used here. In addition, it wants another 100-odd depots to be de-notified from the purview of the Act where only permanent employees are used. While the salaries of the departmental labour cannot be reduced, the overtime payments to them can.
While the food ministry is petitioning the labour ministry, around 27,500 workers who work under what it called the direct payment system are waging a battle of their own. They have petitioned the National Industrial Tribunal asking for equal-work-equal-pay citing the significantly higher benefits to workers in the 162 depots.
The direct payment system worker gets paid R15,500 a month.
The Commission for Agricultural Costs and Prices in its report Price policy for rabi crops 2013-14, has stated that over the last five years, while the minimum support price for wheat has increased by 51%, the economic cost of procuring the same by FCI has increased by about 39%. Correspondingly, the average handling cost per tonne for 2010-11 for contractual labour was R41.40 while for departmental labour it was R311.10 and for workers under the direct payment system, R136.90. This indicates contractual labour of FCI was the least expensive. However, the ministry of labour has prohibited employment of contract labour in the depots of FCI, the CACP noted.
Which side succeeds first will determine whether FCIs expenses go up or down.